Government creating 50,000 tonnes of onion buffer to curb price rise

Centre has started creating a buffer stock of 50,000 tonnes of onion to check prices in coming months in view of drought conditions in producing states, a senior food ministry official said on Tuesday, June 4.

Wholesale prices at Lasalgaon in Maharashtra, Asia's largest wholesale market for onion, have shot up by over 29 percent to Rs 11 per kg on Tuesday when compared to Rs 8.50 per kg on same day a year ago, as per official data.

In national capital, retail onion prices are ruling at Rs 20-25 per kg depending on varieties, as per tre data.

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"Due to drought conditions in producing region, production of rabi onion is expected to be lower. likely shortfall in production may put pressure on both availability and prices during lean season,"  official told PTI.

Cooperative Nafed, which has been asked to undertake procurement under Price Stabilisation Fund, has so far purchased about 32,000 tonnes of rabi (winter) onion, only variety that can be stored and used later during lean period after July.

Besides onion, official said government is creating a buffer stock of 16.15 lakh tonne of pulses this year.

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Key onion growing states such as Maharashtra, Karnataka and Andhra Presh are reeling under drought conditions this year.

As per first estimate, onion production in current 2018-19 crop year ending June is estimated to be slightly higher at 23.62 million tonnes as against 23.26 million tonnes in 2017-18. government is expected to revise estimate later factoring drought impact on production.

Harvesting of rabi crop, which accounts for 60 percent of India's onion production, is almost complete. India has three seasons for onion - Kharif (summer), late Kharif and rabi (winter).